Wow, I wish I had an extra $130 per month. But it’s disciplined spending and a dose of reality that makes me keep a level head and not blow $130 per month.
My wife and I were walking around our local downtown area a week or so ago when I walked by a new place and stopped. It was a martial arts academy, and it reminded me a lot of a martial arts academy that I had participated in for a few months years ago.
Back a number of years ago, I can’t even remember, but I’d say probably 10 or so, a friend of mine brought to my attention a martial arts academy that he wanted to try. I was looking for something fun so I tried it out and I loved it!
The academy featured kung fu as it’s main discipline. It was taught not so much from the perspective of physical combat as it was for self-defense, self-discipline, and to achieve grater peace. Taking part in mediation practices along with the physical training was highly encouraged, especially for those who were working at higher levels.
I never got to the higher levels. As much as I loved it, there were a few drawbacks at the time. It was pretty far away from where I lived. It was probably 30-40 minutes away, which made getting to class as often as I liked difficult. It was also expensive. After the initial sign-up deal, the prices went up to a pretty steep price per month. I don’t remember exactly but it was probably $90.
But back to my story.
Walking by, the logo and the name looked familiar, though it was quite a few miles away from where I practiced.
I ventured in just to see what was happening, and after a minute of conversation, the person I was talking to indicated that it was familiar to me for a reason: It was a second location of where I used to practice!
How awesome. I instantly had thoughts of picking up where I left off. I don’t do as much physical training as I should, and I really enjoyed what I was doing back then. Now, I wouldn’t have the location issue, as the current location is only about three miles from where I live. Getting there and back would be a cinch.
However, there are two things that would simply make this prohibitive. First, is cost. It’s now $130 per month. If I were to use it, I would certainly get benefits of going. And paying that much, I’d definitely be motivated to go and to get as much out of it as I could. But, that price tag is way too rich for our budget. We simply don’t have the wiggle room in our budget with everything else.
The second factor in the way is time. My wife stays at home, but our life is certainly much more busy now that we have a newborn. He’s eight weeks old now and our evenings and weekends are pretty full as it is. As it is, from the time that I get home until bedtime, or from wake until sleep on the weekends, I’m not even sure where all the time goes. I think it would be completely selfish to take the four or five hours a week that I’d be pulling out to go do that.
I think the way I have to approach it is this:
Maybe someday I can do that. It’d be a ways away according to any budget I can come up with, but one can hope, right? But in the mean time, this should serve as motivation to use the workout tools I have. We have a treadmill right in our basement. We have sidewalks around our neighborhood. I have a perfectly good bike in my garage. I could probably take 2 hours a week to engage in these activities, and do them for free. Admittedly, I don’t do much of those now, so I should at least start somewhere.
This is definitely motivation. It’s a bummer that I won’t be able to pick up my martial arts, but that’s simply a luxury item that there isn’t room for, neither from a time nor a budget perspective.
Monthly Archives: July 2009
Money Hacks Carnival #73: Working For The Weekend Edition
t’s the middle of summer, the middle of the month and the middle of the week as Money Beagle is proud to present the 73rd edition of the Money Hacks Carnival.
With all that said, there can only be one thing that we’re working for in this slew of middles.
The weekend!
Here are some fun summer things to do that won’t break the bank and are great summer weekend things to do for fun! Enjoy these and the great articles that make up this weeks carnival.
Editor Picks
Billeater presents Dorm Life – Cheap College Living Tips posted at Billeater. There are some great tips and a lot of them. I didn’t do too bad in college, but this list would have helped me out. Print this out for any college bound person you know, as the time is coming soon.
Anne Simone presents 100 Motivational Blog Posts for the Unemployed posted at Psychology Degrees. Everybody knows that unemployment is the highest it’s been in decades. These are a group of blog posts that can help you through if you find yourself in that unfortunate situation.
ChristianPF presents 10 Minutes, 10 Months, 10 Years | Review posted at Money in the Bible | Christian Personal Finance Blog. I loved this post, it really gave a new perspective on how to prioritize things, and it can apply to things personal finance and beyond.
MoneyNing presents What to Do When Money Conflicts with Ethics posted at Money Ning. Ning always posts some great articles and this is no exception. Don’t miss this read!
Career
FMF presents Four Ways LinkedIn Can Help Your Career posted at Free Money Finance.
Linda Jones presents 100 Useful Twitter Tools and Feeds for Your Job Search posted at JobProfiles.org – Job Descriptions and Online Schools to Start Your Career.
Aryn presents How to Work at Home and Stay Productive posted at Sound Money Matters.
d. ninja presents What would you do? posted at Punch Debt In The Face.
nissim ziv presents First Interview Questions | First Interview Tips posted at Job Interview Guide.
Debt & Credit
Joe Plemon presents How Does Debt Snowball Work? posted at Personal Finance By The Book.
Roshawn Watson presents Colleges Pimping Their Students posted at Watson Inc.
The Dough Roller presents Freecreditreport.com Versus Annualcreditreport.com–Where to get your free credit report posted at The Dough Roller.
Mr Credit Card presents Pitfalls To Chargebacks posted at Ask Mr Credit Card.
Kate Kashman presents One Small Step to Improve Your Finances posted at The Paycheck Chronicles.
Patrick @ Cash Money Life presents Debit Card Versus Credit Card – Which Is Better? posted at Cash Money Life.
Michael Schindler presents What You Should Know About Your FICO Credit Score posted at Your Personal Finance Source.
apply4-credit presents Benefits of Getting a Credit Card Online posted at Apply4-Credit.
Silicon Valley Blogger presents myFICO To Drop Experian Credit Score and Report: One Less FICO Score posted at The Digerati Life.
Economy
PT presents Cash for Clunkers Bill posted at Prime Time Money.
Frugality & Saving Money
Sarah Eliza presents Your Toolbox for Obtaining Organic and Local Produce… AFFORDABLY! posted at Devastate Boredom,.
Save Money presents Revising and Simplifying My Budget (One More Time) posted at How I Save Money.net.
Chris presents Exchanging currency when buying property posted at Home I Own.
Matt Jabs presents Emergency Fund Is For Emergencies ONLY – 6 Ways To Leave It Alone posted at Debt Free Adventure!.
Anthony Samuel presents Save Money on Your Coffee Addiction: Buy a Starbuck’s Gift Card posted at Personal Finance Analyst.
Ray presents Is A Costco Executive Membership Worth It? posted at Money Blue Book.
Madison presents WTDirect $25 to $150 Sign up Bonus posted at My Dollar Plan.
freefrombroke presents Car Allowance Rebate System – Cash For Clunkers posted at Free From Broke.
Tom Drake presents How To Build An Emergency Fund posted at The Canadian Finance Blog.
Wojciech Kulicki presents Overview of Cash for Clunkers posted at Fiscal Fizzle.
Tim Johnson presents 5 Easy Ways to Save Over $1,000 on Your Move posted at Relocation.com.
kathryn presents The 20 Best Twitter Users To Follow For Money Tips posted at Out of Debt Christian.
Leave Debt Behind presents Need to Lower Your Car Payment? Here’s what to Do posted at Leave Debt Behind.
Income
Online Dividends presents $100 Checking Bonus at Bank of America posted at Blogging Banks.
Insurance
Jim presents What is the Average Cost of Car Insurance for a Teenager? posted at Finance, Credit, Insurance and all.
Brian McKay presents Best Auto Insurance: Do I Need Rental Car Insurance? posted at MonitorBankRates.com.
Investing
One Family presents Southwest Airlines (LUV) – Stock Analysis posted at One Family’s Blog.
Mike Piper presents Where is the best place to open a Roth IRA? posted at The Oblivious Investor.
Dividends4Life presents 12 Dividend Stocks With A 5-Star Strong Buy Rating posted at Dividends Value.
Darwin presents Lazy Portfolio Claims to Beat S&P – But Upon Further Inspection… | Darwin’s Finance posted at Darwin’s Finance.
Dividend Growth Investor presents Best Yielding Stocks for 2009 2Q Update posted at Dividend Growth Investor.
jim presents Best Online Discount Brokers posted at Blueprint for Financial Prosperity.
Saj Karsan presents Screening For Value posted at Barel Karsan.
The Smarter Wallet presents Investing In Gold: Trading Spot Gold vs Buy and Hold posted at The Smarter Wallet.
Manshu presents PEG Ratio posted at OneMint.
Bank Savings Review presents Highest CD Rates – July 2009 posted at Bank Savings Review.
nickel presents Reinvest Automatically With Lending Club posted at fivecentnickel.com.
Todd presents Investing in Master Limited Partnerships posted at The Personal Finance Playbook.
CJ presents What is a Roth IRA? posted at Wise Money Matters.
Ray @ Financial Highway presents Canadian Discount Brokerage Review and Comparison for TFSA and RRSP posted at Financial Highway.
TIP Guy presents Estimation of Beta-Based Expected Returns posted at TIPBlog.in.
Other
Aniruddha Gore presents How Banks Calculate Average Daily Available Balance posted at Let’s be curious.
My Life ROI presents The Three Most Influential Lessons From My Childhood posted at My Life ROI, Getting the Best Return On Life.
Home Life Weekly presents Credit Card Safety Guide posted at Home Life Weekly.
vh presents Foil debit card hacking and balance inquiries posted at Funny about Money.
Patrick @ Money Saving Deals presents FREE iPod with Mac Computer posted at Cash Money Life Deals.
Jack Schmidt presents Real Estate: The Time to “Buy Low” Is Now posted at SectorMatic Money Journal.
Chris McClelland presents Estate lessons we can all learn from Michael Jackson posted at Lucrative Investing.
Matthew Paulson presents Qualified for an Interest Rate Buy Down? Take Advantage and Save posted at American Consumer News.
MatthewPaulson presents Advantages of Using Credit Unions posted at Fine-Tuned Finances.
debt kid presents Why You Need an Emergency Fund posted at DebtKid.
Ben presents Happy Financial Independence Day posted at Money Smart Life.
That concludes this edition. Thanks for all the great submissions!
The next Money Hacks Carnival will be hosted on July 22nd at Suburban Dollar. Get your submissions in today. Have a great week!
Our Water Bill Is Going Up Less Than I Thought
I was excited to see that our water bill will only be going up about 5% total for the next twelve months. We have been hit with 10-15% increases for the past couple of years, and I had been expecting a similar increase this year, but the increase was less than I had anticipated
One of the things that our city did is fix a problem that I complained about as soon as I moved into the city. Not that I had anything to do with changing it, but it was still nice to see. The problem: They went from collecting water bills four times a year to collecting them six times a year. But in doing so, they kept the ‘base fee’, which is a fee you pay just for having service, the same. This resulted in a 50% increase in revenue in the base fee structure. I didn’t think that was very fair, and was happy to see that they actually lowered the base fees by about 30% this year. Though that only represents a small portion of our total bill, it’s still nice to have even a little bit of savings!
Financial Moves In The Event Of A Job Loss
With the economy the way it is, I think it’s a good idea to have preparations in the event of a job loss.
My job is what I would consider relatively safe. I recently transferred into a just created position that is fully funded for the foreseeable future. ‘Baseline’ positions, as they are known here, are considered the best type to be in, because the customer funds them for a year at a time, and generally funds them in blocks versus individually.
Still, even though I don’t feel insecurity, I’ve learned that it’s always best to be prepared.
So, I have somewhat of a contingency financial plan in the event that I suddenly found myself unemployed. This would require a lot of changes since my wife is (by our choice) staying home full time.
The Plan
Unemployment Benefits / Health Care
I would expect that any state unemployment benefits that I would receive would be eaten up by health care premiums, whether it be COBRA or a privately funded insurance policy.
Paying the Bills
We have an emergency fund specifically for events like this. The money isn’t earmarked for anything else. We would use this to pay essential bills. It is funded for about 4 months.
If unemployment were to continue for longer than that time, we would look into one of several options. First, we could sell some investments. We have non-retirement investment holdings that I could sell that would sustain us for another 6 months or longer. Second, we could re-evaluate some of our other cash holdings. We have additional dollars alongside our emergency fund that are earmarked for things like a new car, home repairs, etc. that could be re-allocated if necessary.
Concentrate on the Job Search
Due to having a fully funded emergency fund, I wouldn’t be panicked, as I know that we would be able to pay the bills for quite a good long time without running into financial difficulties.
This would allow me to focus on finding a new job.
Reducing Expenses
There are definitely some expenses I would look to cut as a method to reduce our cash outlays. Even though we have a fully funded emergency fund, the fact remains that with a job loss, it would no longer be fully funded after I found new work, and would need to be re-built. I would employ the following strategies to make sure that our cash lasts as long as possible and to ensure that we could get back on track as quickly as possible once I found new work:
- Postpone student loan payment 1 – We have two student loan payments, once of which is paid ahead. We currently make at least the minimum payments, but we could suspend those if need be with no penalty for at least four years. I’m hoping that I would get a new job by then!
- Eliminate Netflix – We’re currently on the barebones plan for $4.99 a month, but I’d still suspend that.
- Eliminate eating out – We spend probably about $80 – $100 a month getting pizza, takeout, or going out occasionally. We would have to buy more groceries, but this would allow us to reduce this amount by a decent amount.
- Unlevel some of our spending – I currently put aside an equal amount every month so that our monthly spending is fairly even. But, this has increased the amount of cash that is on hand. So, for example, instead of putting aside $35 per month for the cat’s vet bill, I would suspend doing that, although I would have to ‘catch up’ later on. There are other categories that would help us in this regard.
- Let the lawn go brown – I admit I like having green grass. I don’t water nearly as much as some of our neighbors, but the sprinkler system would be turned off if I lost my job.
- Reduce or eliminate the A/C – The design of our house and landscaping makes it where we run the air conditioning on most days when it goes over 82 degrees. I would increase this threshold as well as re-adjust the thermostat to reduce the energy use.
- Cut back grocery spending – If the job loss was short term, we could get by pretty well by eating down a lot of the food we have in the pantry or freezer. I’m a big believer in stocking up just so long as you don’t waste food, but this would give a cushion for cutting back grocery bills as we could go through our existing food stockpile which would cut grocery bills down for a bit.
There are definitely other things that we could look at but I think that these would keep us afloat for a long time and let me concentrate on finding work.
In future posts, I will share some experiences in the past that gave me some of this knowledge. I’ve actually had to employ some of these in the past, but under different personal and financial circumstances.
What plans do you have in place that I missed discussing? I’m always up for ideas!
Net Worth Review: July 2009
July saw our three month streak of positive gains come to a close, as the stock market has done a slow downward spin erasing many of the gains from the last several months.
ASSETS:
Property -I use a combination of Zillow and CyberHomes. I make a small adjustment based on what I’m seeing things sell for, and I remove 7.75% for expected selling costs. For the month, the value went down, continuting a trend showcasing the mostly downward spiral of real estate values in the Michigan market.
Autos - The value of our two cars has held pretty steady the last couple of months as the used car market has heated up. We saw a modest decline, but nothing unexpected.
Investment Accounts - Our investment accounts declined 7%, pretty close to tracking the market decline for the month as there was a pretty decent giveback of gains made over the past few months.
Cash Accounts - We raised our cash accounts slightly. I expect this to fall next month with some planned purchases that we’ve been saving up for.
Retirement Accounts – Our retirement account went down 4% for the month. As with the investment accounts, we’ve tracked the markets decline, with a slight offset due to my contributions. My employer stopped matching, but we’re still contributing 10% of my salary at this time. Unfortunately, we’re not maxing out our retirement, but I still feel like we’re moving in the right direction.
DEBT:
Mortgage - Nothing special, just the monthly payment. Our mortgage is a 30-year loan at 5.875%
Car Loans – We paid off our second car a year ago and we have no outstanding car loans!
Credit Cards – This is the balance that’s accrued since the last statement. We pay our credit cards off every month. We have a little lower balance than last month but still quite a bit higher than usual (as evidenced by the increase from 12 months ago) simply because of the added costs of our newborn.
Student Loan 1 – This is the loan that had a higher balance and a higher interest rate. After paying the car loan off, we concentrated our debt payment on this loan. We’ve paid 57% of the balance from a year ago, which is great, although as you can see, we’re not putting as much towards it nowadays since my wife is no longer working, but I’m still happy with our progress.
Student Loan 2 - This is the second loan but it is at a very low interest rate. We make the minimum payments on this loan. After Student Loan 1 is paid off, we’ll have to decide whether to snowball the payments toward this loan, or switch to something else (such as the mortgage, investing, or adding even more to our retirement)
Overall, our net worth went down 7.6% for the month, and is down 25% from a year ago.
I was disappointed in the decline, but not surprised as I didn’t expect the market rally to sustain itself, given how much we went up so quickly over the prior months.
Stay tuned.
Would You Hire A Driver For Your Own Car?
Personal Finance Playbook is one of the newest additions to my RSS reader feed. I get his articles delivered when he writes them.
One of the articles made me really think about how far I would go to save money.
In this post, PFP writes about how he was planning a bachelor party. He was planning things the right way because there would obviously be some drinking going on, since he was planning alternative methods of transportation other than driving.
First, I applaud his responsibility in that regard. Always better safe than sorry.
However, the post went on to talk about how he was planning to bypass some of the more traditional methods of transportation in such a circumstance, namely a limo or a taxi.
The reason, both were simply too costly.
Again, more applause to PFP for being frugal in that regard. It sounds like he was planning some fun stuff, but the reasoning was that the ‘getting there’ was less important than the fun of the planned events, so why spend the money?
Right on.
The alternative, though, to the three ideas listed above (driving, limo, taxi) was given as this. He was planning on hiring someone from Craigslist to drive his car, where they would be (hopefully) fully sober and available for the egal, vening.
Now, I like the idea of turning your own car into a limo / taxi of sorts. Again, cue up the applause for saving money and creative thinking.
BUT, this idea had all sorts of red flags on it. Specifically:
How do you know if the person you hire is a licensed and safe (driving record-wise) driver?
How do you know that they are trustworthy, in that the second the bachelor party heads inside somewhere, that the person doesn’t peel rubber and head to the nearest chop shop?
Or, maybe a little less dramatic, but what if there is damage to the car in some way? What happens then? What if they pull a ‘Ferris Bueller’s Day Off’ and take it for a joyride (if the car is joyride-worthy)?
What are the auto insurance liabilities in the event that there is an accident?
What are the medical liabilities in the event that the ‘driver’ was somehow injured?
I don’t know. Maybe I’m just paranoid but there seems like maybe just one too many ‘what if’ situations that could play here.
If it were me, I know that I’d be nervous about all that, even if I decided to go through with it. I’d be peeking around the corner to make sure that the car was just there and that if it was, there wasn’t a group swapping out my battery and tires with those found from a salvage yard.
I’ll be interested to see how this turns out, so hopefully PFP will post a follow-up when and if he decides to go through with this.
I guess, I’d probably consider other alternatives:
I might see if someone I know is willing to fill this role. Granted, depending on the places that they’re going and the ‘pops’ that might be consumed, this might be embarrassing, but I’d still make sure to leave no stone unturned here.
I might see if the costs can be spread around. Most bachelor parties that I’ve attended generally involve people ‘pitching in’ to ensure the fun times of the bachelor. If everybody threw in an extra $5-10 with the argument being that we all get a ’safe and fun time’, this might make the taxi a more feasible idea without putting the burden exclusively on the host.
What do you think? Are there other ideas? Would you consider this? Let me know what you think.